US Markets Continue To Charge Ahead
Friday night’s small fall in the futures market of around 6 points should reverse quickly when trading resumes later this morning on the ASX 200 after the Trump tax changes moved closer to becoming law at the weekend.
The vote came well after Wall Street had closed weaker on fears the FBI investigation into the Trump campaign’s Russian links was moving closer to the White House (part of which was due to an erroneous report on ABC News in the US).
The US Senate voted 51-49 in favour of the changes which will now go to a conference with the House of Representatives to condense the two bills in one, which will then be sent to President Trump for signing later this week.
The vote came late Friday night, well after the news that Trump’s former National Security Adviser had pleaded guilty to lying to the FBI and was now co-operating (via a plea deal) with the special prosecutor looking at the links between the Trump campaign and Russia.
The tax bill was approved despite it boosting the size of the US deficit for years to come - the great irony was that all those small government low tax small no deficit Republicans in the US Congress approved he tax cuts and their unknown impact on interest rates and the US economy.
Before the vote Eurozone shares fell 1.1% on Friday (as they closed when Wall Street fell in response to the Mike Flynn plea deal news), and the S&P 500 lost 0.2% (after recovering from a 1.5% decline on the Flynn news).
Eurozone shares should rebound tonight as a result of the tax deal.
Over the week, US shares rose 1.5% to new record highs, Japanese shares also rose 1.2%, and Australian shares rose 0.1% but Eurozone shares fell 1.1% and Chinese shares lost 2.6%.
Oil prices fell 1.1% gold was off, as was copper, but the iron ore price rose 3.2%. Despite the impression, Friday saw a strong gain for most commodities.
The Aussie dollar was little changed at just over 76 US cents.
Despite Friday’s losses, Wall Street saw weekly gains with the Dow posting its best weekly performance in nearly a year.
The S&P 500 trimmed its losses on Friday to end the day 0.2% lower at 2,642.19, up 1.5%. The Dow rose 2.9% over the week to finish at 24,231.59 — its best performance in a year.
But the Nasdaq Composite lost 0.6% over the week to 6,847.59
The US dollar index, a gauge of the buck against a basket of peers, eked out a modest gain, rising 0.1% for its first weekly gain in four.
The ASX 200 index added 19 points, or 0.3%, to 5989, while the All Ordinaries index also rose 0.3% to 6075.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.